Robert Triffin’s Latin American Missions for the Federal Reserve System in the 1940s

Robert Triffin (1911–1993) studied economics at Louvain and Harvard. In 1942, he started working at the Board of Governors of the Federal Reserve System, becoming responsible for the Latin American section. Triffin was a progressive catholic and quickly adopted a Keynesian Weltanschuung, that the market economy was inherently unstable, and that government intervention was necessary to stabilize the economy. Moreover, already in his first (empirical) articles in the 1930s, he developed a center-periphery vision of the world economy. He was then well placed to become a new type of money doctor, in the spirit of the Roosevelt Administration’s Good Neighbour policy. In cooperation with his Latin American counterparts, Triffin elaborated modern monetary frameworks, adapted to the specific needs of a country (a great contrast with the earlier Kemmerer missions). His first important assignment was to Paraguay. The reform was well received, and several other countries also asked for a “Triffin mission”. But, notwithstanding Triffin’s Keynesian vision, he followed a monetarist methodology, paying attention to the money supply and its counterparts. In 1946, Triffin became one of the first economists at the International Monetary Fund. He was there at the basis of the Fund’s monetary statistics, which were a crucial stepping-stone for the Fund’s monetary approach to the balance of payments. At the Fund, Triffin became quickly absorbed in European recovery issues. He became famous for his proposals for regional monetary integration, which were completely in line with the country specific approach which he had developed in his Latin American missions.